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Like cash, use gift cards wisely Insurance firms offer gift of coverage

NEW YORK — Expecting a stash of gift cards Christmas morning? Better use them wisely.

That’s become a little easier, because many retailers have eliminated expiration dates and fees that sap the cards’ value over time.

The changes come well ahead of proposed rules from the Federal Reserve that wouldn’t allow gift cards to expire for five years, among other changes.

Even so, about $5 billion, or about 6 percent, of what Americans spend on gift cards this year won’t be used, including what’s lost to fees, according to TowerGroup. That’s down from a high of 10 percent in 2007, said Brian Riley, research director at the financial-services consulting firm.

“You should treat it like cash and have it be a contribution to something you really need or want,” said Laura Gurski, partner in the retail practice of consultant A.T. Kearney. Here’s how experts advise wringing out the full value of cards you receive:

1. KEEP IT SAFE. Expert say that as soon as you get a gift card, put it in a safe place. That means stashing it in an envelope reserved just for gift cards. Some say to just put them in your wallet along with the credit cards.

2. MAXIMIZE THE VALUE. Buy discounted merchandise when redeeming a gift card. Shoppers wanting to take advantage of post-Christmas discounts should do so between Saturday and Jan. 2.

That’s because stores won’t be swimming in holiday leftovers through February, because they came into the holidays with lean inventories.

“You’ll find the peak” of inventory right after Christmas, Riley said. You also should look for any special discounts from retailers, such as J.C. Penney, specifically for gift-card users.

3. USE IT ALL UP. Riley says it’s better to spend beyond the value of the gift card because that will ensure that you used all of it.

Many shoppers don’t redeem gift cards to their full value — but $3 on a gift card is $3 that’s not coming out of your own pocket.

4. USE it ON NECESSITIES. Want to buy that winter coat but couldn’t afford it? Use the gift card toward the big purchase.

Gift cards might be free money, but experts say you shouldn’t just buy anything, particularly in the difficult economy.

“You have to plan what you want to use it for,” Blossom said.

Gurski said customers getting an all-purpose card such as an American Express gift card should use it on necessities such as groceries.

5. EXCHANGE WITH FRIENDS. Don’t like that particular store? Then get together with friends and swap cards. You can even do it online. CardHub.com, a leading credit card comparison Web site, just launched a gift card application for Facebook.

Its main feature is the Gift Card Wish List, which let users pick favorite stores so friends know what gift cards they’d like.

But it also has a gift card exchange, which lets friends post cards they want to buy or sell at a discount.

6. SELL OR SWAP CARDS WITH STRANGERS. Card-bearing customers can turn to sites, such as www.plasticjungle.com or www.swapagift.com, to exchange gift cards or even donate them to charity. But there is a price. At www.plasticjungle.com, customers can sell the card for cash and get up to 90 percent of the balance.

7. REGIFTING. It’s always an option. And you can also use the card to buy an early present for Christmas 2010.

MIAMI – Health care providers are rolling out a different sort of stocking stuffer: Gift cards that can be used to pay bills and insurance premiums or for services at eye doctors and dentist offices.

Blue Cross Blue Shield of Florida might have the largest program, selling cards at over 1,000 Winn-Dixie and CVS stores in the state. The providers selling them say they can make a good gift, but industry observers say some cards might not be right for many consumers.

“The person can make the decision on where to use it. That is really the gift of it,” said Sue Allen, a spokeswoman for Holy Family Memorial Health Network, a Wisconsin hospital and clinic chain that sells gift cards.

In the Blue Cross Blue Shield program, with a $19 card, recipients save 10 percent to 50 percent on braces, dentures, crowns, fillings, oral surgery and cosmetic dentistry; 20 percent off brand name and generic medications through most major pharmacies; and 10 percent to 60 percent on eye exams, glasses and contacts.

Its $59 card can be used to help pay a premium or toward access to health insurance.

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